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tv   Fast Money  CNBC  March 21, 2019 5:00pm-6:00pm EDT

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global growth concerns, nike doesn't do anything to add to that negativity. it's pretty positive double-digit growth. >> underscoring the consumer strength and manufacturing maybe weakness. >> true. >> in the economy as a whole. >> thanks for watching today that does it for "closing bell." >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tonight on "fast" check out shares of nike getting knocked down after its earnings report the company call kicking off right now. plus levi strauss wowing wall street as it makes its public debut that stock soaring more than 30%. we'll tell you what the jean dream means for the other unicorns waiting in the wings. the dow, s&p and nasdaq all up 10% as the 10-year yield hits its lowest level since january 2018 there is one group of stocks getting absolutely turbocharged
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and that would be tech the sector soaring more than 2%. just within striking distance of an all-time. the semis going absolutely wild. apple also getting a huge boost, closing the day higher by 4% as yields come under pressure, is that growth trade back on can tech take us back to new highs? guy. >> it's clear people are going to reach a lot of these stories make sense. steve has talked about amazon. i think there's names we don't talk about all that much that got throttled last year on the back of this china trade deal. for example, look at lamb research we don't talk about it often but that stock basically got cut in half from the time trump spoke about this, the december 24th low, and now it's starting to crawl its way back trade is about a third of the valuation of a xilinx, for example, and with better earnings growth. if you're looking for names that
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accelerate to the upside on the back of this tech wave, i would look at lam research at these levels. >> is this tech wave here to stay >> i think the tech wave will have a lot more -- i think we can get a little more gas or a little more juice from the technology companies we've been wrong about where this market is toptoppy and may you have another inning, thanks to powell. >> by the way, that's not stuff sty x's best work. >> it's about mr. roboto and the tech trade. >> semis up 3.5% today, extraordinary move but fagain this comes after a move up 36% off the bottom if you remember what the market was light when we had very little growth expectation, we had yields getting somewhere well below 250 but even in the early part of 2018 when we were
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between 225 and 250, what was outperforming? mega cap tech. mega cap tech makes sense because these are companies that have an enormous amount of growth relative to their piers and can turn it on and off despite mr. roboto, i would want to be in mega cap tech. >> apple is one of those names that's absolutely been on fire it was trading 142 at the beginning of the year. here it is pushing towards 200, mel. that's pretty amazing. it seems like every week we hear from somebody else who's changing their tune in terms of either they're raising the price target or upgrading the stock itself today apple again had multiple different sources out there, coming out there, analysts raising prices once again and focusing on exactly what they should be in my opinion. services, wearables, that's the place to go. they know the iphone is slowing but they have got to look for where's the growth look at microsoft today. s satya nadella has been there
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about five years they were obviously smaller when you talk about cloud but look at what he's done and the acquisitions so he has spent money to get exactly where they want to be and he's done an unbelievable job. then you look over at the semis. when i look at micron, we all looked at that report last night and thought that it was maybe modestly okay. some of the guidance was pretty awful, quite frankly when you have a report like they gave and we want in because maybe it's troughing, the multiple is incredibly low corvo got an upgrade today you go through the semis and they were absolutely on fire today. xilinx, all these various names are screaming to the upside. >> the question, if i may, is the question within apple when you started off your statements with apple, is there a reason for apple to go back to pre-selloff highs or is this --
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we're finding a range for the mega cap tech. >> so the concern for apple, right, before the sell-off was about china. the concern for apple was about that high-priced phone do some of these concerns, do they truly get offset by this new streaming service which they have yet to announce on monday which we don't know any details about, which needham upgraded the stock on apple was a pillar of strength in this tech trade today is there a reason for it to be this high? >> the reason is that the market sentiment has changed. again, there's rotation in the stocks where people know the valuation makes sense relative to where the growth is apple will not give you anything extraordinary in terms of their streaming business and nothing has changed. china, while i do believe that the data has bottomed. i don't think that the market for apple phones in china is any different than it was four months ago i definitely don't think their services business will be something that excite the
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naysayers. what's going on with apple, totally perception apple tends to overshoot in each direction. every analyst on the street was out of this one. >> i agree with the analysts, they're wrong all the time when you look at this company, what did they do tim cook said, hey look, we've got to cut these prices. they did that and things did change over in china they started to get a little bit more market share and it started coming up. so i think they at least reacted -- >> that's my point, though we're back to november levels in the stock. it's above its 200-day for the first time since november. so is it fairly valued we said there's a little more juice left with these tech trades is this coming to the end for the tech trade even though you have a little more juice >> i'm not sure i understand that analysis. i'll say this about apple. i bought the stock after that sell-off in fact i have an average price
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of $196. guess what, i'm going to still hold the stock i also don't see what has changed. i think the perception of apple is one of these stocks that continues to overshoot in each direction. i think the market wants to take this thing higher but that's not why i'm trading it. >> i think it's a fair question for people who are looking at this market and saying the s&p 500 is 3% away from record highs again. was global growth concerns, were they where they are right now? has anything resolved for us to push past record highs at this point? what's different >> well, the fed is different and now every central bank on the planet -- it's very helpful, clearly. if you ask me, i thought what happened today should have happened yesterday it doesn't matter. so it is what it is. i also think the market is
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saying maybe there's a runway for a u.s./china deal. for example, i mentioned lam research that stock is nowhere near where it was when the trade tariff started last year. so you could still see further upside in some of these names. >> to bring this back to a macro and getting off of apple, if you look at the last time the s&p paid over 18 times forward multiple, you have to go back to the dotcom bubble. you have to go back to 2000 to 2005 i'm not sure someone is willing to give an 18 plus multiple. >> we're nowhere near there. >> no, but at 3,000 in the s&p we are near there. when we're talking about 2940, you're a blink away from the 3,000 number in the s&p. my point is do you buy the market now have things changed? >> do you sell into this market
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here seeing there could be 100 points on the s&p upside >> my major problem was that made me turn, i said it weeks ago. if he stopped quantitative tightening and takes off all future hikes -- >> all your dreams came true, grasso. >> i'm saying you have up to 3,000 in the s&p, but when you think about it, why are you paying the multiples on the market we've seen. >> because we paid 18 times current for three out of the last five years. so what's your earnings for the s&p in 2020? >> 166 times 18 and you get your number you've got to look back on forward multiples. the last time we paid was back -- >> i want to go back to the analog when we didn't have extraordinary growth and the fed was in benign mode the market trade had a multiple
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a lot of people had a challenge with then you get back to earnings yields versus the 10-year and equity is the only place to be we're at 2 plus percent gdp growth environment if you look at the global indicators, we saw the -- i think european data for the short wood, i'm not saying it's out of the woods this is an environment where the market can rally. >> you say 2% gdp as if it's a given. i don't think it's a given. >> that is the gdp we're in right now. >> going forward if you look back, when we look back at gdp, we came from 4.2 to 3.4 to 2.6 >> part of the needham argument today was that cash that apple has, right obviously the catch flows that they have. so again, when you look at some of these tech names, let's go back to what we were talking about. how about everybody is talking dividend, chasing for yield.
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well, who has great yield right now? microsoft is pretty good, intel, apple. >> big cap tech. >> you go across and look at ciscos and oracles of the world, they all seem to be humming along at a very nice pace. i still think there's upside in some of these names. cisco, what a great transitional company this is, like microsoft, mike apple where they're moving themselves as big as they are, they are shifting very rapidly to a different source that's going to push them higher. >> you're obviously going to need technology and probably materials because banks in this environment might lag for quite some time. but listen, i thought the market would roll over quite some time. clearly it's wrong today's action should have happened yesterday it doesn't matter. you should be concerned that the vix is at levels that historically over the last couple of years has been concerning people -- the complacency of october, early october, seems to have found its way back in the market now i think what's been driving the vix is the fact -- >> the fed. >> the fed, that's right.
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>> it's the fed, it's the trade war, it's all those. so many things have been thrown at this market that it's amazing actually that the vix is trading where it is now compared to where it was before. still ahead, we will have much more on this market rally and get the two stocks one top technician says are primed for a breakout. plus nike sliding after its earnings report. the ceo is speaking on the company conference call right now. we'll bring you the latest. and from leggings to jegings, investors loves levi's. is this a test of what we can expect from a flood of ipos this year we will explain. much more "fast money" right after this you're searching for something more... right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in.
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internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back to "fast money. it was a sea of denim on wall street today as levi strauss went public. the stock soared in its trading debut closing up 32% bob pisani is down at the nyse with more on this. hey, bob. >> it certainly was a day of denim, melissa it looked like a scene from woodstock down here. the initial price was 14 to 16 wait a minute, it priced at 17 and opened at 22.22. that's a 30% pop and it pretty much stayed there all day. a lot of happy insiders with this one plenty of pent-up demand because
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the ipo market was closed for four months. a strong start to the year for stocks, up 12% with the s&p. you've got an iconic brand and you have most people consider a reasonable valuation the ceo insists in fact their valuation was justifiable. >> i believe this is sustainable for the long term. maybe not double digits forever, but we've got clear runway for growth across the categories we're competing in we're building share in our core categories and expanding the new categories last fiscal year when we finished the year, our growth was really broad based if you looked at it in the categories where we competed, we grew every single category >> demand has been strong. in fact it was strong all day. now, a distinguigood rule of thf you trade 100% of volume on the first day, that's an indication of strong demand we ended with more than 120% of the volume don't expect this to happen with everybody else there's a ton of stuff out there. 234 potential ipos with a
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whopping $700 billion valuation. they could seek to raise upwards of $100 billion a year that's the magic number because the old record was $96 billion in 2000. so who's going to buy all this stuff and will there be a revolt when they put the prices too high they're going to do that, you know that. stay tuned waiting in the wings, airbnb, pinterest, robin hood, peloton after this they'll all be looking to push their valuations higher in fact lyft, reports they'll go for 22 or 23 back to you. >> is that a denim suit, bob >> i left the denim home today it was nice to see some people down here but it looked like the whole floor was going to join a jug band in 1969 at one point. it was cute. it was cute. you guys know what i'm talking about. >> you're always very dapper, bob. bob pisani at the new york
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exchange let's first talk about the ipo itself oh, grasso, look at you. >> i tell you, it's very comfortable on this desk with this denim you could get cnbc "fast money." >> i like how you pop had collar. >> it looks way too cheesy wearing a flat collar. not cheesy popped. okay >> this looks cool i think i might look too good with this. really good looking. >> does anybody want to comment about this stock >> well, if you're looking for a denim -- first of all, in the united states you've seen denim on the upswing incrementally, a smidge up. you've seen it globally a smidge down so net neutral basically on denim, but levi's is your denim play it's the most direct denim play. if you go to abercrombie or american eagle, they're 30% to 40% denim.
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if you look for a resurgence in denim, you can play it those three ways it's too early to be lululemon. >> the only one qualified to make statements about fashion is probably guy is denim the new athleisure? >> can't it just be denim? you're wearing denim too >> shh. >> sorry. >> those are wranglers. >> they're garanimals. guy is wearing plain pockets, no >> the fact that i wear levi's is an indictment on the company. you don't want me to be your target audience. do you know who's a big fan? s.e. hinton. he looks like pony boy or two-bit from the movie, right? >> none of this is good. none of this is good. >> no, it's a compliment. >> the one area there is some glo growth and we heard this throughout the day
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what are some of the other areas, what are the other verticals? women, that's one of the areas for sure i think that's an area that obviously it's not quite at penetrated right now but that's really where it could go because that could be a growth driver going forward for levi. >> there's also a casualization of the american workplace. >> like wearing jeans on "fast money. >> things are moving in that direction, away from some of the more formal -- >> you don't do that, though i don't either. >> i'm not a jeans guy at work, man. that's just not the way it is. >> shorts? >> shorts yes. absolutely shorts. >> not when he's on the hook because you can see his legs >> on the hook it shows up. >> for more on levi's head over to your watching "fast money" on cnbc, first in business worldwide. in the meantime, here's what else is coming up on "fast." as the right route continues, the traders are going yield hunting with a number of
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stocks sporting hefty dividends. plus cvs is getting in on the cannabis craze. >> we're going to sell weed, yo. >> not quite but they will be selling cbd we'll tell you what it means for the pop trade. much more "ft ne rht tethisasmoy"ig
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welcome back the 10-year yield sinking to its lowest level after jerome powell suggested there would be no more hikes this year. dom chu has more. >> government bonds are booming. the 10-year note yield hovering right around 2.5% level. traders and investors have been bidding up prices for government debt by so much that yields not
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just here but also abroad are at these medium to longer term lows as well. as lows at as the 10-year treasy note yields are here there's next to nothing on german bunds. the yield there is 4 basis points, just 0.04 of 1%. the 10-year japanese government bond or jgbs are yielding negative 4 basis points. it's leading some investors to take another look at yield hunting on the stock side of things the dividend yield on the s&p 500 is 1% or thereabouts there are stocks that dropped in price like ford motor with a 7% yield. the same with telecom and media giant at&t that's 7% there as well. macy's is yielding 6% and ibm has been on a near-term uptrend but still yields a better than market 4%. of course the big question,
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melissa, is how healthy and safe those dividend yields are, but they could be a place to find bigger income checks than government bonds if you want to take on that risk. back over to you. >> all right, dom, thanks. well, given this rate rut, we thought it would be a good time to go yield hunting now listen up, here's how it works. we use a name like ibm with a dividend yield of 4% if you're buying the name, you are hunting the stock, you like it if you'd rather let it fly away, you'll see a red duck, red meaning no the duck will be taking off. easy, straightforward? got it >> probably not. >> guy, you're up fair. >> that's not fair that's like when you're in class -- >> the explanation is first in mind and we're going to use ibm the exact stock i used in the example. >> so you gave me the test before the actual test. >> so you can think about it
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>> now, what do you say, do you hunting it or do you let it fly. >> the duck flies away on this one. fly, fly away. this is in a five-year downtrend. the people that are optimistic say last year in january was pretty good. maybe they turned it around. you're still in a five-year downtrend, you have no earnings growth i think people are pointing towards maybe they are going to be the name in block chain the way microsoft became a huge name in cloud maybe ibm can turn it around, i don't think they can. >> i think they can and here's why. i own ibm. >> so you do like it. >> so you're hunting it. >> yeah, i'd be hunting this thing. look at that, it's right there so the reason i like it though, guy, is red hat. i think of all the acquisitions they've made, mistakes but i think this is big, it's a monster and they are positioning themselves going forward because of that, i actually disagree with guy. usually i'm together with you,
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but not this time. >> all right the next stock here. ford, steve grasso. >> i would hunt this one. >> nice. strong out of the gate. >> it's up 13% year to date. i like it technically. i think it's constructive and they're restructuring in europe. they're quasi-restructuring here i think the worst is over for ford. >> i like autos as you know but i also like gm and i'd let this one fly. >> fly, fly away. >> i look at the management team the c suite at gm is far superior actually i think ford has credit issues in there so i let it fly. we'll move on to the next stock, at&t. it's got a fat dividend, 7%. pete najarian, what do you say >> i am hunting this son of a guy. >> wait a second, no, you're not. >> no, it's flying away. i screwed it up. i'm not a big fan and i'll tell you why. i know they made huge acquisitions, right?
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these massive acquisitions give them a position of their debt is like $180 billion. >> it's going to get better. >> that's great. >> it's going to get better and streaming is coming on. >> and nobody is competing there. but my reasoning is i think they are way too levered because of that so i'm not into it. >> so look, in an environment where basically money is free, isn't this great news for at&t oh, by the way, they pay 7%. i hunt this bad boy because i think the sum of the parts can finally be measured. the deal is through. they are making a major move over the top i love this. streaming is better -- >> everybody goes there. you know what? when you lose 7% in the stock, how is that dividend looking not so good. not so good. >> there are a lot of headwinds that seem to be clearing right now. i'm hunting. i never said it officially, i'm hunting it. >> i like the little scope thing, though. >> pete is not sure what it means. >> it's like a target. >> you put the periscope up like
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a submarine. >> that's a mixed metaphor >> we're not renaming the game it's taken this long for you guys to understand the basic skem concepts last but not least macy's, tim. >> i'm going to hunt this one. both to be consistent and because i look at this not because of the yield, i think that's a gift for staying in a stock that clear low has some margin pressure but also does not have the balance sheet issues their debt has been trading tighter. i like macy's as a turn-around story that's taking a long time. >> you know what, what i was thinking was, seriously, we could change it to -- if we called the game the hunt for red october. >> yes. >> and then you could have sean connery could be one of the guys and pete and i could portray the whole thing. tim could be alec baldwin. i would hunt macy's. i would hunt macy's as well. >> you like macy's. >> so put the little green thing up there i'd say, yes, i do like macy's
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if you look, valuation compelling, maybe they have turned the boat around the stock has -- >> it's exasperating playing this game with you guys. our next guest has two stocks that he thinks are heading for a breakout we'll go off the charts with rob sluymer. if we start with the s&p and look at this indicator in the bottom panel, proprietary indicator we have and tracks a percentage of stocks with rising weekly wmomentum and if we go back to 2016 because we think that's an analogy, when that indicator got above 90%, it's a relatively rare reading it tends to happen around major cycle lows the market is still early on in a bull cycle but heading for a pause. in fact if you look at what happened as we came off those levels, at the end of the first quarter of 2016, into the
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beginning of the second quarter, it really went sideways for two, three, four months we think there's a similar setup coming in here last week it was at 92%. the market is getting a little extended from a tactical standpoint we think we're heading for a pause. so this data looks very similar to 2016. we think as we move into the second quarter as a lot of stocks get super heated, growth stocks, semi conductors and what not, we'll wanting to get a little bit more into defensive names. so let's take a look at the 10-year bond yield it's obviously come down a long way. there's two things here. one is this momentum indicator in the bottom panel. just a simple rsi. it's starting to get oversold. while this chart here, this line at the top is the downtrend that goes all the way back to the beginning of the 1980 highs, that's where the market stalled in 2007. that's where the market stalled
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at the end of 2018 so what do we do here? it's a little bit tough to see but in this band here between call it 250 and 2%, in the middle of that band we don't think there's tremendous amount of downside in bond yields, particularly given this momentum indicator that tends to track multi-week moves is getting oversold so while the equity market is red hot, we've got growth stocks working, semis working what do you do i'll come back into a name we've talked about these names that have been pushed down i think are going to be pretty timely pfizer coming right back to the 200-day will be a timely place to be. it's lagged considerably if we get any rotation at the end of the quarter, that's one name to take a look at verizon is sort of a controversial name, but again it's coming off that 200-day moving average and that relative
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strength is starting to firm you've got a 4% dividend on verizon, a 3.4% dividend on pfizer i think those are great names for a few months in the second quarter. >> rob, why don't you come on over. >> bring him in. >> we will bring a chair in. >> if you shoot, that's a good thing, you're hunting it. >> thank you, evan before we get more into some of your dividend stocks, i want to go back to the chart of the 10-year yield where you showed the rsi and showed that it was looking oversold do you think yields will go higher will the growth trade in your mind be in jeopardy if rates do go higher? >> yields have been falling, the market has been going higher weekly data suggests yields aren't going meaning fully lower. i don't think we'll have them going below 2% we get into this churn period. as that starts to happen, a lot of the growth stocks are due for
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a pause. if you look at software names. adobe we saw begin to churn around, we saw nike today after hours. a name like keys, a 5g play has been red hot and screaming those stocks will be get set for a pullback and pause. >> does that mean you think the s&p 500 won't recapture its previous record? >> i think it will churn for a couple of months before it accelerates for the second half of the year. >> if you look at the treasury yield curve and the parts that have not moved as much, do you think the yield curve could strengthen again would that change your view on anything here? >> my guess is it's going to take some time before it starts steepening again we don't have any evidence of that technically yet as we move into the second half of the year, a lot of our concerns about the economy slowing down, earnings slowing down, that's all going to get reflected in the stocks. the curve starts steepening and you'll probably want to go back
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to more cyclical names. >> like banks. >> and even the banks. we've still got to get into this churn period >> rob, i know that you came early to the show so i don't know if you were listening very closely. did you listen to the rules of the game that we were playing? >> yes. >> we want to give you a bonus round. >> let's go. >> rob with a bonus round at the end of the desk. at&t, you hunting it or let it fly. >> i guess i've gone with verizon so i'll go with at&t i'll hunting it. >> it's deeply oversold but if i have to pick those names over some of the high growth stocks, i'll take at&t. >> rob, thank you. thanks for playing the game. so competently compared to some of the other people here on this desk rob sluymer. pete, i'll go right back to you. rob likes both of those.
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would you like verizon instead >> no, neither of them going back to his pfizer call, i love that one. you've got a 3.4% defensiividen yield. coming up, nike getting kicked down after its earnings report we'll tell you what the ceo just said that's got investors running scared. plus cvs getting on the cannabis craze to sell cbd we will explain when "fast money" returns
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as you look at the cbs products as it's referred to, we're going to be carrying them in eight states. we'll carry the topical products only. >> branded by cvs? >> not branded by cvs. jim, anecdotally, we've heard from our customers that have used those products that, gee, it's helped with pain relief for arthritis and other -- other ailments so we're going to walk slowly, but we think that this is something the customers are going to be looking for and is part of the health offering. >> that was a sneak peek of jim cramer's interview with cvs
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health ceo after they partnered to sell cbd products in some of its stores you can catch the rest of it at the top of the hour. he just and on "the closing bell" and had this to say about the cbd boom. >> we are in conversations with many national retailers. let me frame the opportunity for you. estimates of cbd are that it will grow from $600 million to $22 billion in three years every national retailer in the country is trying to figure out this space we are having an active dialogue right now because the american people wanting cbd. >> both stocks moving higher as cannabis continues to go mainstre mainstream >> they have had a lot of announcements. really cure leaf is about building a brand and building a footprint. 800 stores, the first one to cut a deal with a big box retailer puts them in ten states in
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addition to all their dispensaries really powerful when we all know this is about building brands. and they're doing it -- they're getting distribution at a time the industry is having a lot of time raising capital doing a deal with one of the biggest distributors in the world is exactly where we want to go. this is what cbd is going to do. >> we've seen alcohol companies get involved, tobacco companies get involved, retail operations get involved i think you have to buy a host of the main names in the cannabis space and then the rest of them will probably in the next couple of years be absorbed because there's thousands of these companies that will make money, some of them. some of them will never make money. you've got to buy the branded names you know. >> it seems like this is much more of a sure thing it is still a challenge to suspend it into a drink. also the fda hasn't issued any rules when it comes to food and
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cbd and food so if these guys can get into cvs now with just these lotions and topical treatments, eventually when the fda puts out guidelines on food, et cetera, that could be a whole new market for them and a huge leg up on distribution on those products. >> obviously if they get in now and then going forward once they presented themselves and as long as they're living up to all the obligations they have got and everything that the fda is going to have on top of them, it's going to be great. you're always looking for the first entrant. it's like netflix. those that can get in, i think, have that moat. >> they're building a wellness kind of approach and that's different -- it's less about recreational, i would say, and by the way hemp is rushing ahead of cannabis and thc in capital markets there's a ton of deals coming through now. check out shares of nike falling after hours. we'll hear from the ceo in just
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a few minutes. plus biotech booming as the group is having its best quarter since 2013 will one bad egg in the space sicken this rally? we have all the details right after the break. invent exper to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you, at his family. his steinway, which met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival.
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we've got an earnings alert. nike hitting aftn after-hours l. >> so the stock is down after hours and ceo mark parker was on the conference call just a few minutes ago. when you're listening to him, it almost sounds like you're listening to a tech company and their earnings rather than a shoe company he talked about their focus on innovation pipeline, their digital direct-to-consumer channels, the self-lacing shoes and the company is finding increased gains as they spend more money on technology here's what ceo mark parker had to say just a few minutes ago. >> we're seeing the early wins pile up and it's bringing scale to every facet of our triple-double strategy what's so exciting is that the more we invest a stronger digital capabilities, the more growth opportunities we uncover. >> parker also focused on how big their growth in china is as those consumers continue to crave nikes.
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it's been a much hotter part of the company. >> all right, eric, thank you. pete, why is the stock so low? >> i think valuation has been one of the issues. this thing has had an absolutely incredible run we had the greater china numbers that surprised everybody shocked them they continue to kill it when it comes to the internet side of things are they doing everything right? yes. is their free cash flow great? yes. when you look at valuation, they do have great growth but when you start to push towards 27, 28, 30, that's pretty high for what we're talking about so on a pull back i think nike is a great opportunity. >> north american sales disappointed that's where the lion's share of their revenue comes from but last night we said digital transformation did you hear that sot? that's called sound on tape. >> there's no more tape anymore.
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>> pardon me >> there's no tape anymore he said digital transformation inventories only grew 1% they had 7% growth inspect terms of sales i think it's north american sales. i think you buy the pullback. >> 24% fx neutral -- or currency free growth in china to me is extraordinary and so much for the pushback on american brands. i know this sounds crazy to talk about. we're talking about tech companies. but clearly that is allowing these guys to have major pricing power. frankly that was gone for a long time i'm long the stock it was such a big move, this is not a surprise to see this pull back. >> the original reason nike spiked higher is because it was recovering in north america sales way back on the chart. to guy's point, that's the reason it's showing a lot of headwinds. under armour has outperformed
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even into this print and is grossly outperforming nike if that stabilizes, it could be an interesting play. coming up, biogen having its worst day in 15 years after pulling the plug on its alzheimer's drugs we'll tell you how high it could get. -driverless cars... -all ground personnel...
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welcome back to "fast money. shares of biogen a major buzzkill as that stock fell 30% for its worst session in nearly 15 years the stock cratering after the company pulled the plug on its highly anticipated alzheimer's drug the move sending it sinking today. is the biogen bust just the tip of the iceberg for a bigger sell-off in the space? >> you could have that that's why i'm a firm believer that you have to buy the ibb even though that's the third top holding within the ibb it's better than having the binary bet on biogen independently of owning the rest of the space so if you don't know the space, if you can't follow it, if you're not a doctor, none of us are, and if you're an average investor and don't have any insights on that, you buy the index, the etf, versus the single stock.
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>> the reason why i disagree is because alzheimer's is the holy grail. none of these companies have been able to figure out alzheimer's. that's why i think this is specific to biogen so i wouldn't impugn -- >> the rest of the space. >> the rest of the space. >> but this sell-off, does it feel like too much a 30% sell-off on this news. >> a whole potential franchise just got written down to zero. >> the potential of that drug. that drug. which was a big number. >> that was where there was a lot -- arguably growth projections priced in as well. >> but let's look at a company that makes $23 a share before this without this in there and all of a sudden you're looking at it trading $230 it's a 10 pe, right? it's gotten very, very inexpensive, i think i stared at it all day the implied volatility of the options never rose enough. there was nothing there. >> could this be the next celgene? does this force them to either be bought or to buy? right? >> more to buy than -- i think they're more in a position to
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buy than be bought but that's a fascinating question. >> i like to pose fascinating questions. >> finally got there >> people have been saying we're waiting for the m & a. it's one of the things keeping the mega cap biotech stocks down and why the smaller stocks that have outperformed, what's that other -- >> xbi. >> by the way, break twing 250 a big deal that's the level it needed to hold and it's well through that now. options traders are betting that the biogen bottom may be in brian is breaking down all the action. >> basically option activity huge today, trading 23 times normal average daily volume here what's interesting here, to pete's view somewhat bullish on the stock is calls outpaced puts 1.5 calls were traded for every put. the biggest area strike was the
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april 230 call there was a lot of small money trades but the bigger size trades were biers at $9.30 so that's playing to the upside with a break even of $239.30 all traders were risking was $9.30. when you look at the chart here, that breakdown below 250, you have that range all the way down to 206 is the low. 263 is going to be the top end resistance here. so that's a huge gap 60 bucks either way that it can move that's why people are using calls rather than stock. if there's some sort of change of view, low pe, reasonable time to buy traders were using calls to do that to the upside. >> pete, did you see this? >> to brian's point, the implied volatility is just not there it's shocking to see a stock that pulls down 30%. we don't see that very often yet the implied volatility
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doesn't scare people it just wasn't there. >> brian, thank you. we'll see you tomorrow for the full show of "options action." by the way, guy will be there too. >> come on o-o!h woho up next, your first tra for tomorrow, final trades (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. (butcher) we both know you're not just looking for pork chops. you're searching for something more...
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it is time for the final trade today. pete najarian. >> we started with tech, talked about semis, marvel. this thing is going higher giddy up. >> i'm going to push back on pete and he can't say anything about it because he's already said his piece i'm long at&t. i think this goes higher. >> sold! >> the wireless business is growing. i think the warner media group is underestimated. the sum of the parts, at&t. >> steve. >> micron had a nice pop but if you look at the dram chart it's still going lower. micron, sell >> do you have a jean jacket, guy? >> yeah, of course i do. cut the sleeves off. >> nice. >> bad ass. >> a jean vest >> no, tim. >> do you wear a jean jacket and jeans? >> this is a mea culpa part of
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the show if we give mel a hard time, we shen -- she went to harvard university last night they beat georgetown in georgetown. >> see y bouack here tomorrow at 5:00 for 5:00 for more "fast. "mad money" starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain, but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. there is nothing like a late market sea change orchestrated by the federal reserve the s&p climbed


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